MGMT 3000 Exam 1 (Lyons, UGA)

business environment

The combination of all contextual forces and elements in the external and internal environments of a firm.

Leadership

The ability to drive change and innovation through inspiration and motivation

The Pillars of Management

1. Strategic Position

2. Organizational Design

3. Individual Leadership

Components of strategy

1. Managing trade offs

2. Choosing a set of activities

3. Creating fit

Organizational Design

Developing and aligning organizational components to achieve strategic objectives

Mangement

The act of working with and through a group of people to accomplish a desired goal or objected in an efficient manner

bureaucratic organization structure

A clear differentiation of tasks and responsibilities among individuals; coordination through a strict hierarchy of authority and decision rights; standardized rules and procedures; and the vertical separation of planning and execution so that plans are made in the upper ranks of an organization and executed in the lower ranks.

environmental change

how quickly things are changing

environmental complexity

number of contextual factors in the environment

contextual intelligence

The ability to understand the impact of environmental factors on a firm and the ability to understand how to influence those same factors.

Building Contextual Intelligence

1. Develop appreciation and awareness of history

2. Stay attuned to trends in environment

3. Seize firsthand experiences

4. Engage in scenario assessment and contingency planning

contingency planning

The systematic assessment of the external environment to prepare for a possible range of alternative futures for the organization.

environmental scanning

A tool that managers use to scan the business horizon for key events and trends that will affect the business in the future.

Includes trend analysis, contextual intelligence, and stakeholder mapping

contingent view

A view of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects in its environment.

human relations movement

The belief that organizations must be understood as systems of interdependent human beings who share a common interest in the survival and effective functioning of the firm.

managerial view

A business framework where the firm is seen as a mechanism for converting raw materials into products to sell to customers.

Outside parties not considered

scenario building

Forecasting the likely result that might occur when several events and stakeholders are linked together.

scientific management

A focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods.

shareholder view

A business framework where the job of top managers is to produce the highest possible stock market valuation of the firm's assets.

Stakeholder Mapping Steps

1. Map stakeholder relationships within firm

2. Identify subsets within stakeholders

3. Determine stakes for each stakeholder

4. Define connections between stakeholders

Multinational Strategy

The parent company organizes local subsidiaries and gives them autonomy to develop products tailored to local tastes

Global Strategy

focus on developing overall scale economies and global efficiency instead of catering to local tastes

International Strategy

Combine elements of multinational and global strategies by using foreign subsidiaries to produce and distribute products

Transnational Strategy

Balance a firm's international activities among efficiency, local responsiveness, and organizational learning

stakeholder view

A business framework that identifies and analyzes multiple groups that interact with the firm and attempts to align organizational practices to satisfy the needs of these various groups.

strategic review process

The process by which senior leaders of a corporation meet with business unit managers to review progress toward specific goals.

Core Competencies

a network of unique activities that strategically fit together and are difficult to replicate

trend analysis

A tool where key variables are monitored and modeled to help predict a change that might occur in the environment.

VUCA

An acronym for volatile, uncertain, complex, and ambiguous that captures the context in which today's organizations compete

board of directors

A group of individuals elected by shareholders and charged with overseeing the general direction of the firm.

comparative advantage

An economic theory that proclaims countries should specialize in producing goods for which they have the lowest opportunity cost of production.

competitor

Any organization that creates goods or services targeted at a similar group of customers.

customer

The people or organizations that buy a firm's products and services.

economic dimension

The general economic environment (e.g., GDP, inflation, and unemployment) in the markets where the firm performs activities.

employees

The people who make the products and provide the services that allow a firm to exist.

external environment

Represents all of the external forces that affect the firm's business.

general environment

Includes the technological, economic, political/legal, and sociocultural dimensions that affect a firm's external environment.

Wholly Owned Subsidiaries

a fully operational, independent entity that a firm sets up in a foreign country to conduct business in that market

Phase model of globalization

Exporting; cooperative contracts; strategic alliances; wholly owned affiliates

globalization

The integration and interdependence of economic, technological, sociocultural, and political systems across diverse geographic regions.

internal environment

A group of parties or factors that directly impact a firm, including owners, the board of directors, employees, and culture.

legal dimension

The regulations and laws that a firm encounters in its markets.

owners

The people or institutions that maintain legal control of an organization.

political dimension

Refers to the political events and activities in a market that affect a firm.

social values

The deeply rooted system of principles that guide individuals in their everyday choices and interactions.

sociocultural dimension

Demographic characteristics as well as the values and customs of a society

supplier

A company that provides resources or services for a firm to help in its creation of products and services.

task environment

Includes entities that directly affect a firm on a constant basis and include competitors, suppliers, and customers.

technological dimension

The processes, technologies, or systems that a firm can use to produce outputs.

conflict of interest

Conflicts that occur when employees or managers engage in activities on behalf of the company and have a personal interest in the outcome of those activities.

corporate social responsibility (CSR)

A business's obligation to pursue policies, decisions, and actions that align with the objectives and values of society.

Corporate Social Responsibility Pyramid

economic, legal, ethical, discretionary (IN THAT ORDER!)

corporate social responsiveness

The practice of businesses responding to pressure from society to engage in socially responsible ways.

Spectrum of Responsive Strategies

Reactive (doing nothing) --> Defensive (doing the bare minimum to meet societal expectations) --> Accommodative (does all that could be expected of them) --> Proactive (does the literal most)

distributive justice

A subset of justice that deals with the distribution of wealth among members of a society.

economic responsibility

A business's duty to make a profit and increase shareholder value.

ethical responsibility

A business's duty to meet the expectations of society beyond its economic and legal responsibilities.

ethics

The study of moral standards and their effect on behavior and conduct.

corporate level strategy

The way a company seeks to create value through the configuration and coordination of multimarket activities

Business level strategy

the determination of how a company will compete in a given business and position itself among its competitors

fiduciary

A person who is entrusted with property, information, or power to act on behalf of a beneficiary.

insider trading

Insider trading occurs when a manager uses inside information to bet for or against a company's stock before that information is publicly available.

justice

An ethical philosophy that provides the framework for society to judge what is morally right or wrong, fair or unfair, and establishes ways to evaluate or punish those who behave in immoral ways.

kantianism

An ethical philosophy claiming that motives and universal rules are important aspects in judging what is right or wrong.

legal responsibility

A business's duty to pursue its economic responsibilities within the boundaries of the law.

morality

The standards that people use to judge what is right or wrong, good or evil.

Types of resources

Rare (not controlled or posses by many competing firms), Imperfectly imitable (impossible to duplicate), valuable (allow companies to improve efficiency), nonsubstitutable (no other resource can replace them)

privacy

A person's right to determine the type and extent of information that is disclosed about him or her.

strategic CSR (competitive advantage)

Corporate social responsibility activities that are directly related to business activities so that they can combine social welfare with financial welfare.

Steps to implement CSR

1. Identify points of intersection between company and society

2. Select social issues to address

3. Create corporate social agenda

4. Create a social dimension to the value proposition

conglomeration

the act of growing through unrelated diversification, essentially by acquiring companies in different industries

OKR

Objectives and Key Results - current best practices for organizational goal setting and measurement

procedural justice

A subset of justice claiming that rules should be clearly stated, consistently obeyed, and impartially enforced.

trade secret

Any type of information used in conducting business that is not commonly known by others. It often provides a strategic advantage for a company over its competitors.

utilitarianism

The ethical philosophy claiming that behaviors are considered moral if they produce the greatest good, or utility, for the greatest number of people.

virtue ethics

An ethical philosophy claiming that morality's primary function is to develop virtuous character.

whistle blowing

The release of evidence by a member of an organization that proves illegal or immoral conduct to executives in a company or regulating agencies outside a company.

Bargaining power

The pressure that a supplier or buyer can exert on a company.

Kohlberg's stages of moral development

- Preconventional: Stage 1 (Punishment and obedience) and Stage 2 (Instrumental change)

- Conventional: Stage 3 (Interpersonal Relationships) and Stage 4 (Law and Order)

- Postconventional: Stage 5 (Social contract) and Stage 6 (universal principle)

barriers to entry

Obstacles a firm may face while trying to enter a market or an industry.

cost leadership

A strategy that aims to provide a product or service at as low a price as possible to a broad audience.

differentiation

A strategy in which a firm seeks to be unique in its industry along a dimension or a group of dimensions that are valued by consumers

supply side economies of scale

Cost savings achieved when the volume of a product produced by a firm enables it to reduce per unit costs.

Competitive advantage

when a firm can create more economic value than competitors by engaging in a strategy that is difficult or impossible for others to duplicate

sustainable competitive advantage

an advantage that cannot be copied by the competition, and they've stopped trying

first-mover advantage

A competitive advantage that occurs when a firm is first to offer desirable products or services that secure customer loyalty.

focus

A strategy in which a company "focuses" its sales efforts on a specific geographical region, a specific group of purchasers, or a specific product type.

Strategy

Pursuing a set of unique activities that provide value to customers; making trade-offs about which businesses to pursue, what products to produce, and which customers to serve; and aligning resources to achieve organizational objectives

primary activities

The activities involved in the physical creation of the product and its sale and transfer to the buyer.

resource-based view

A theory that a firm can develop a competitive advantage through the collection and harvesting of resources.

strategic flexibility

The capability to identify and react to changes in the external environment and to mobilize internal resources to deal with those changes.

support activities

Activities that provide the support necessary for the primary activities to occur.

SWOT analysis

A tool that allows managers to take a snapshot of their firm's internal strengths and weaknesses as well as the opportunities and threats that are evident in the external environment.

value

The amount consumers are willing to pay for a product or service. It comes from offering a lower price than that of competitors or providing a unique product whose benefits outweigh a higher potential cost.

value chain analysis

A systematic way of examining all of the activities a firm performs and determining how they interact to form a source of competitive advantage.

Threshold Task

accurately assessing and effectively responding to your environment

Porter's Five Forces

Threat of new entrants, bargaining power of suppliers, threat of substitutes, bargaining power of customers, rivalry among existing competitors

Threat of New Entrants

- Supply side economies of scale - produce large quantities of goods, it becomes cheaper

- Demand side benefits of scale - The more people use the product, the more valuable it becomes

- Customer switching costs - the more difficult it is for a customer to switch, the less likely they are to do so

- Capital requirements due to scale of entry - need capital/finances to enter market

- Incumbency advantages of size - brand name

- Unequal access to distribution channels

- Restrictive government policy/regulations

Bargaining Power of Suppliers

Suppliers can exert power by threatening to raise prices or reduce the quality of purchased goods and services.

Occurs when:

- There are no substitutes for the supplier's products

- The supplier limits production

- The supplier does not consider the industry as one of its major customers

Threat of Substitutes

The threat posed to a company when buyers can choose alternatives that provide the same item or service, often at attractive savings. This is one of Porter's five competitive forces.